Page 86 - Washington Nonprofit Handbook 2018 Edition

provision of the organization’s articles. Such a provision may require
that the organization’s assets be distributed for one or more exempt
purposes, be distributed to the federal government or to a state or
local government for a public purpose, or be distributed by a court to
another organization to be used in a manner as in the judgment of the
count will best accomplish the general purposes for which the
dissolved organization was organized. The sample articles of
incorporation available online at https://wayfindlegal.org/tools/legal/
contain provisions for meeting the organizational test.

y Bylaws. The bylaws are a legal document that governs the board of
directors and how decisions are made at the board level. The bylaws
must be adopted by the board of directors.

y Conflict of Interest Policy. Although an organization is technically
not required to have such a policy, the IRS strongly suggests that every

organization adopt one, and the Instructions to Form 1023 include a
sample document that can be adopted and included as part of the
application. See sample Conflicts of Interest Policy online at https://
wayfindlegal.org/tools/legal/.

(ii) Required Information

Before drafting responses to the Form 1023, gather the following
information:

y Description of Activities. Form 1023 requires a description of the
organization’s past, present and planned activities. With respect to
each activity, describe (a) what the activity is; (b) who conducts it;
(c) where it will take place; (d) when the activity is conducted; (e) how it
will be funded; (f) how it furthers the organization’s tax-exempt
purposes; and (g) what percentage of the organization’s total time is
dedicated to such activity.

y Director/Officer Resumes. Form 1023 asks for qualifications of the
organization’s officers, directors, trustees, highest compensated
employees (who receive over $50,000 per year) and highest
compensated independent contractors (who receive over $50,000 per
year). The resumes or summaries of qualifications do not need to be
extensive for volunteer officers and directors. Highly compensated

WASHINGTON NONPROFIT HANDBOOK -75- 2018